NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
Institutional Capital Management, Inc. and Daniel Lee Ritz Jr.(Principal)
AWC/2010022679801
The Firm permitted registered persons assigned to a branch office to
utilize outside email accounts
to conduct firm business, even though the firm did not have a
system or procedure in place
to capture, preserve and monitor those emails. As a result, the
firm failed to preserve
all firm-related email communications of registered persons
assigned to that branch as
required.
The firm failed to perform any
supervisory review of email
communications of registered persons assigned to that branch, and
that Ritz permitted
a firm registered representative to engage in investment advisory
activity through the
representative’s state-registered investment advisor (RIA) and
failed to supervise that
activity. Ritz was the principal responsible for supervising the
representative, but failed
to supervise any facet of his investment advisory business and was
generally unaware of
what it entailed. As a result of
Ritz’ lack of supervision, the
representative was able to engage in extensive selling-away
misconduct without the firm’s
detection, raising more than $5 million from investors through
sales of promissory notes
without the firm’s knowledge. The firm failed to obtain all
required information for some customers who purchased securities
through the firm in
private placement offerings.
Institutional Capital Management, Inc.: Fined $65,000
Daniel Lee Ritz Jr.: In light of financial status, no fine; Suspended in Principal capacity only for 4 months